Does it make a difference that Binance Coin, FTX, and Huobi have all burnt tokens?

Spread the love

 366 Interactions,  4 today

The token burning process in the crypto space is not a novel innovation, but it has only recently come to light. Binance Coin and Binance’s Quarterly token fire, in particular, piqued the community’s attention and curiosity. AMBCrypto, for example, indicated in February that the burn protocol may be a major explanation for BNB’s price increase.

Though BNB’s burn has received a lot of attention, other exchanges and network tokens have followed suit. We examined a few tokens and programmes to determine if the token burning process had resulted in a fundamental transition for both the immediate and long-term scenarios.

Binance Coin – Start with the rich and richer?

Binance’s success as an enterprise has been unprecedented, only surpassed by Coinbase’s recent acknowledgement. In terms of trading volume, it is one of the largest exchanges, if not the largest. Binance Coin has long been available to the public, but it has never had a significant effect on the market before now.

BNB’s rise in 2021 saw the currency surpass its previous all-time peak of $40 and then more than tenfold. Its market cap increased, propelling BNB to third place on CoinMarketCap. As a result of the increased interest, BNB’s burn protocol was priced higher, as the 14th quarterly burn replaced 3,619,888 BNB tokens, totalling $165 million.

RECOMMENDED READ:  What happens if Cardano ‘shocks' this Bitcoin Bull?

However, after burning 1,099,888 BNBs, its 15th quarterly burn was worth nearly $600 million. We examined Binance Coin’s regular chart to see how it affected the price.

Source: BNB/USDT on Trading View

Binance has burned 15.74 percent of its original 200 million stock to date, bringing the overall supply to 169,432,897 tokens. Binance’s model has outperformed all assets, and as seen in the chart above, the last four quarterly burns have been positive, with the 14th quarterly burn taking forwards a staggering 1,074 percent increase. It is worth noting that BNB’s rally has also been fueled by the rise of Binance Smart Chain and the overall expansion of DeFi. Furthermore, the overall outlook has been positive in 2021.

Has burning meant performance for everyone?

Source: FTT/USD on Trading View

Kyber Network is a burning protocol as well, but it varies somewhat in implementation in that Kyber burns KNC tokens, which are part of the feed charged for a network transaction. According to Kyber, 70 percent of fees charged are usually burnt, and this may be accomplished once a week or if the Kyber team makes a call.

RECOMMENDED READ:  Lido, the staking giant, is looking to offer services to Solana.

It is difficult to follow the effect because Kyber does not keep a clear record of burning fees, but similar to FTT, the asset has seen growth only in 2021, likely as a result of the broader bullish trend.

Kyber Network is a burning protocol as well, but it varies somewhat in implementation in that Kyber burns KNC tokens, which are part of the feed charged for a network transaction. According to Kyber, 70 percent of fees charged are usually burnt, and this may be accomplished once a week or if the Kyber team makes a call.

It is difficult to follow the effect because Kyber does not keep a clear record of burning fees, but similar to FTT, the asset has seen growth only in 2021, likely as a result of the broader bullish trend.

Source: HT/USDT on Trading View

Finally, Huobi Exchange has burned the most tokens since its launch, with over 260 million HT burned out of a possible 500 million. The total circulation is 179,285, 916, and although the compounding impact for Huobi may have started even sooner, Huobi has only seen a significant rise in growth since the beginning of December 2020. The February crash also demonstrated that, unlike Binance Coin, HT has never held a spot near its all-time peak.

RECOMMENDED READ:  What is PancakeSwap? Understanding PancakeSwap in details

In the following section, we will look at projects that have used singular token burns and analyse the general idealogy and theoretical outcomes of this mechanism for current and future projects.

Leave a Reply

Contact Us